| Financial literacy---defined as how well an individual can understand and use personal finance-related information---has received much attention in past decades due to the increased responsibility placed on the American consumer to understand and manage his or her financial burdens. However, the link between financial understanding (i.e., financial knowledge) and financial use (i.e., financial behavior) has generally been understudied, and there has been little research considering the psychological correlates of financial behavior.;One theory, Bandura's (1986, 1994) social cognitive theory, may serve as a conceptual framework for understanding the interplay between financial knowledge and financial behavior. Social cognitive theory posits that individuals have an internal cognitive appraisal of their own abilities, termed self-efficacy, which is correlated with that individual's motivational and behavioral processes. The theory also provides a modeling process in which individual gain mastery of novel experiences through social shaping. The conceptual model outlined by social cognitive theory served as the framework for evaluating the impact of the W.E.A.L.T.H. Academy, a financial literacy education program mandated for low-income residents of a public housing development owned and operated by the Mobile Housing Board.;The current study found that financial behavior, as measured by the concrete action of opening a savings account, was predicted by the participants' completion of program activities, such as completing one-on-one credit counseling with their financial counselors. On the other hand, several factors were not predictive of financial behavior, including the participants' objective and subjective financial knowledge, general self-efficacy, financial self-efficacy, or resilience. These results indicate that financial knowledge had no impact on financial behavior, nor did the constructs of self-efficacy or resilience; rather, the only predictive variable was the one-on-one interactions that residents had with their Resident Service Advisors, which occurred in the context of the training program. Based on these results, it is suggested that the W.E.A.L.T.H. Academy program structure their program to enhance the one-on-one engagement between program staff and residents, particularly by modeling concrete behavioral steps that participants can subsequently apply. |
